Chatham Applauds NZ Government Initiative

NEWS RELEASE 22- 19 October 18, 2022



CHATHAM APPLAUDS NZ GOVERNMENT CRITICAL MINERALS INITIATIVE

WELLINGTON New Zealand – Chatham Rock Phosphate Limited (TSXV: “NZP” and NZX:
“Chatham” or the “Company") applauds the critical minerals related initiative announced
this week by New Zealand Petroleum & Minerals (NZPaM) a division of the Ministry for
Business, Innovation and Employment.

A discussion document that will form the first stage of developing a New Zealand critical
minerals list essential for most modern technology, is likely to be released for public
consultation before the end of the year.

The consultation aims to create a better understanding of the benefits of a critical minerals
list for New Zealand, creating a consensus on if a mineral is critical, scoping the minerals to
be considered.

In 2018, the then Minister of Energy and Resources. Hon Dr Megan Woods, stated
investigation of REE recovery, was a strategic priority of the New Zealand Government and
it’s encouraging to see this framework for its establishment.

This local initiative mirrors similar developments in Australia where rare earths are now
being classified as Critical Minerals and critical minerals agreements are being executed with
other nations.

The USA is legislating to use non-China REE in defence material and Japanese interests are
signing an agreement for exploration and joint development in Queensland.

The Queensland Government’s Resources Industry Development Plan’s New Economy
Minerals, (NEM) includes selenium.

Chatham consequently applied for an exploration area in western Queensland identified as
having significant accumulations of selenium.

On the Chatham Rise the Company’s 820 km2 granted Mining Permit contains significant
quantities of rare earth elements (REE) and other strategically valuable minerals. As
reported in 2018 we established a separate corporate entity (Pacific Rare Earths Limited –
PRE) to develop the extraction technology to monetise these valuable resources.

All Chatham REE activities in New Zealand and Australia are now taking place under through
PRE, including the scoping study for concentration of Total Rare Earth Oxides (TREO) from
our Queensland Korella phosphate areas.

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Three Rare Earth Oxides, yttrium, neodymium, and dysprosium, described as critical
minerals and Heavy Rare Earth Elements, are found in abundance at Korella as well as
Chatham Rise.

The Australia based rare earths and selenium projects are truly nation-building initiatives
where Chatham intends to play a leading part.

It now looks like the New Zealand Ministry for Business, Innovation and Employment in is
very much on the same wavelength as its Australian counterparts and Chatham, with Critical
Minerals projects in both countries, is uniquely positioned to bring the same benefits to the
New Zealand economy.

Our REE Resources – Australia

• According to an independent report filed with the ASX in 2009, Korella Mine has an
inferred yttrium JORC resource of 4.2 million tonnes at 746 g Y/tonne (i.e., 0.96 kg
Y2O3/t)

• Neodymium and dysprosium were also identified at that time in both overlying
sediments and the phosphate.

• Recent portable XRF analyses has shown the pervasiveness of both yttrium and
neodymium in the Korella phosphate.

• Analysis of Korella phosphate samples has confirmed the presence of dysprosium and
anomalous concentrations of gadolinium and samarium.

• Korella phosphate is the major host of the HREE.

We will be progressively expanding the current sampling and testing program for Korella
and Korella South to quantify resources, including the overlying duricrust and regolith.

Our REE Resources – New Zealand

Rare Earths in phosphate

A study of marine phosphate nodules by the United States Geological Survey reveals
significant quantities of REE within the phosphate nodules on the Chatham Rise. Of the 17
recognised rare earths, 15 are present in Chatham Rise rock phosphate nodules, as well as
other valuable minerals including nickel, cobalt, chromium, vanadium, zirconium, fluorine
and strontium. Collectively these minerals, if they can be efficiently extracted, represent an
immensely strategic asset for New Zealand and could significantly improve the already
attractive forecast project economics based on sale of phosphate.

The contained value may be released onshore (if extraction proves feasible and
economically viable) without any change to the proposed mining system, and any additional
environmental impacts in the Project area.

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Rare Earths in Seafloor Muds

We have also previously confirmed significant rare earths and other valuable minerals in the
seafloor muds in our permit area, including cerium, lanthanum, neodymium,
praseodymium, yttrium, cobalt, rubidium, cesium, germanium, gallium, strontium, thallium
and tungsten.

The primary challenge is the extraction process, and the processing technology required to
viably separate these minerals. In addition, recovering rare earths from muds will involve a
new marine mining system, and therefore will be separate from the existing CRP rock
phosphate nodules project.

Further Independent Research

The information CRP already holds about REEs and other valuable minerals in its permit
areas was generated by independent organisations, with some of this work undertaken a
decade ago.

The current knowledge confirms that REEs occur over a wide area and estimates of the size
of the potential deposits while conceptual, are potentially significant.

As a result of the extremely favourable preliminary research, CRP continues to develop a
deeper understanding of the extraction and recovery potential of the minerals.

Biomining of Rare Earth Elements

Earlier this month CRP advised research progress regarding extraction of rare earth
elements from phosphate minerals by Pacific Rare Earths.

Chatham’s Australian company, Avenir Makatea Pty Ltd commissioned the CSIRO work
program.

Following encouraging results from stage 1 of culturing microbes potentially suitable for
biomining, CSIRO will do more testing as part of an overall program to evaluate bioleaching
to extract rare earth elements.

The first step was the enrichment of natural microbes in three geologic horizons within
Korella, Korella North and Korella South sites in NW Queensland.

Under controlled lab conditions, the native microbes were cultured and have demonstrated
three orders of magnitude cell growth (i.e., from 10
6
-10
7
to 10
9
-10
10
cells per mL) over four
days.

Additional subculturing of the cultures further enriched native microbes.

Subject to continued success for the balance of the preparatory phase, CRP will commit to
longer duration bioleaching tests.

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REE Processing and Enrichment Technology Advance

PRE recently engaged a third party to undertake sensor-based ore sorting of Korella
phosphate testing to most effectively aid in REE enrichment.

Initial testing of a 75kg sample of overlying silicious sediments and phosphate showed
sensor-based (density criteria) ore sorting was highly effective in separating phosphate from
waste.

A one tonne sample of phosphate sent for pilot plant testing has shown particularly positive
results.

Chatham engaged TOMRA Sorting to establish if their sensor-based sorting systems were
capable of sorting Korella phosphate ore from waste material to improve the already
relatively high-grade direct shipping ore.

The test work demonstrated Korella phosphate could be upgraded from a nominal feed of
30% P₂O₅ to a product in the range of 35% to 38% P₂O₅ at acceptable recovery rates.

Korella’s low cadmium phosphate in the range of 35% to 38% P₂O₅ is higher grade than most
internationally traded rock phosphate (which is presently quoted at $US 320/t ex
Casablanca) and is particularly suitable for use by European fertilizer producers which
previously depended on Russian supplies of high-quality phosphate.

In addition, work is now underway to characterise the high silica waste rock from the ore
sorting to establish its suitability as a source of plant available silica and as a feed stock to
produce yellow phosphorus.

Marketing

The PRE target markets involve the sale of TREO with 50% heavy rare earths content to
emerging Australian processors and potentially to Japan, South Korea, USA , Europe and/or
Scandinavia.

About Rare Earth Elements

Yttrium, neodymium, and dysprosium are the three critical minerals described as Heavy
Rare Earth Elements.

They are integral to technology including magnets, computer hard drives, wind turbines,
electric vehicles, lasers, TV and computer screens, exotic light sources and superconductors.
Recent market prices of these rare earth elements are (Source: Institut fur Seltene und
Metalle AG):

o Yttrium oxide US$ 12.28 per kilo.
o Dysprosium oxide US$ 366.61 per kilo.
o Neodymium oxide US$ 129.54 per kilo.
o Gadolinium oxide US$ 66.48 per kilo.
o Samarium oxide US$ 3.71 per kilo.

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For further information please contact:

Chris Castle
President and Chief Executive Officer
Chatham Rock Phosphate Limited
64 21 55 81 85 or chris@crpl.co.nz


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